Measuring the effectiveness of monetary and financial policy in Iraq

Abstract

The Iraqi economy suffers from structural problems that have worsened year after year. Because of the events that occurred in it, and the matter became worse after the destruction of the infrastructure as a result of the wars that Iraq fought. The deterioration in the main economic sectors, the imbalance in the structure of trade, the rise in unemployment and inflation rates at the same time, the great disparity in income distribution, the deterioration of human development indicators, and the rise in external debt as a result of the wars that exhausted human and material resources; It also produced strange phenomena in Iraqi society, especially looting and deliberate destruction. In the face of this tragic situation in the country, there becomes a great responsibility for decision-makers to take appropriate economic policies to reconstruct the country and correct the path that the previous regime was following in the course of the economic movement in light of the new circumstances related to the transition from an economy based on abhorrent centralization to a market economy and from a war economy to Peace and construction economy.
Fiscal and monetary policy are among the most important and most influential economic policies on the economy. Economists have disagreed on which of them is more influential and effective in economic activity. In Iraq, political and economic factors have led to the distortion of policy-making patterns and the limits, scope, and jurisdiction of their policies, especially monetary and financial ones. This distorted their work, affected their tools, and reflected negatively on their effects and the purposes for which they were developed. Therefore, The goal of the research is equal to its importance in demonstrating the effectiveness of either fiscal or monetary policies using the St. Louis model after determining their impact on output and prices, after which they are two basic goals of economic stability policies. The research is based on the hypothesis that fiscal and monetary policies had a negative role in economic activity in Iraq. To reach the goal of the research, it was divided into three main sections, an introduction and a conclusion. The first section dealt with the theoretical framework, while the second was devoted to the development of financial and monetary policy indicators in Iraq, and the next section was devoted Finally, the research reached several conclusions and recommendations.